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Monday, April 4, 2011

LAHORE: As many as 31 top Islamic clerics and scholars of the country have declared the present Islamic banking system 'Hara'am' and 'Ghair Sharai' and termed all the dealings with such Islamic banks un-Islamic as they are based on interest.

The scholars declared the Islamic banking against the Islamic teachings and values, saying that all the business with these so-called Islamic banks was not Islamic.

They gave a 'fatwa' and urged the Muslims not to deal with these so-called Islamic banks.

They agreed on the final judgment after having deep thinking and consultation that no Islamic bank was lending interest-free loans and instead of issuing Qarz-e-Hasna, every institution is involved in interest-based business.

Dr Azizul Bari, a research economist, said that Islamic banking system did exist in Islam but there was no proper platform available for the purpose. "There is a need to introduce a new banking system different from the existing one for the 'real Islamic banking system," he said, adding that ulema, clerics and religious scholars must be consulted for finalising the theory.

He said without getting an expert opinion from the Islamic scholars, Islamic banking system, in its true spirit, could not be introduced and implemented. Commenting on the bank-lending system, He said the proposed banking system should not be devised to earn profit rather it must have the idea to support the borrower.

He, in his verdict regarding existing Islamic banking, said that Islam presents a complete code of life and similarly, in the money lending and borrowing, presents a set of rules but there is no platform present in the prevailing situations. "Furthermore, the rules presented for the system are not being used accurately," he added.

He said government should arrange discussions on Islamic economic system so that the practical shape of the Islamic system could emerge, adding, "We have moved from the divine path owing to which, we have indulged into a severe financial crisis. The nation is facing a financial crunch that was tarnishing the social and economic system in our society."

While referring to the responsibility of the parliament, he said that it was the prime responsibility of the parliament to debate on the issue of Islamic banking and to find a practical way out of the interest-based banking system. On the other hand, the grievances of borrowers must be redressed as no body was hearing against the interest charging on the borrowed amounts.

Islamic economist Abdul Wadood Khan said that no Islamic bank was lending interest-free loans, rather these banks were charging hefty amounts in term of profit against the lent money. He further said that Islamic banks were earning interest by lending and borrowing money on interest, adding that if interest-free lending is introduced, the prices of commodities would decline as the interest amount has been added in the prices of all items. He said Islamic banking was neither Islamic nor banking at all because there is no concept of interest in Islam.